2018年-德勤全球_2018_Global_chemical_industry_mergers_and_acquisitions_outlook_22页_1mb

2018 Global Chemical Industry Mergers and Acquisitions Outlook Summary

Core Content

The 2018 Global Chemical Industry Mergers and Acquisitions Outlook explores the future of M&A activity in the chemical sector, building on the insights from the 2017 Outlook. It highlights the ongoing trends, challenges, and opportunities that are shaping the M&A landscape for 2018.

Main Points

• M&A Activity Trends:

  • M&A activity in 2017 remained robust, slightly below 2016 but higher than 2012–2015.
  • The number of US$1 billion+ deals stayed relatively stable, though mega-deals (US$5 billion+) were fewer, with only one deal surpassing US$5 billion.
  • The absence of mega-deals led to a drop in average deal size and total deal value.
  • The 2017 Outlook suggested a possible shift from growth-oriented M&A to optimization and organic growth in 2018.

• Mega-Deals:

  • The decline in mega-deal activity in 2017 was attributed to regulatory constraints in sectors like fertilizers, industrial gases, and agricultural chemicals.
  • Several mega-deals from previous years, such as the Bayer/BASF and Linde/Praxair transactions, still had pending regulatory divestitures.
  • There is anticipation for larger deals in 2018, particularly in fragmented specialty chemicals sectors.
  • The failed Clariant/Huntsman merger and the potential for new deals from these companies remain relevant.

• State-Owned Enterprises (SOEs):

  • SOEs, especially from Saudi Arabia and China, are playing a more prominent role in the M&A market.
  • SABIC and Saudi Aramco are investing heavily in downstream petrochemical operations, including a US$20 billion facility.
  • Chinese SOEs like Sinochem and ChemChina may continue to drive consolidation to address over-capacity issues.
  • Regulatory changes in China may allow SOEs to invest more freely, both domestically and internationally.

• Private Equity Involvement:

  • Private equity activity declined in 2017, with a smaller share of total M&A transactions.
  • Despite this, private equity firms still made significant investments in niche assets and divestitures.
  • They continue to face competition from strategic buyers who leverage synergies and higher share prices.
  • The rise in valuations may make it harder for private equity to achieve desired returns.
  • However, private equity remains active due to its ability to handle complex transactions and its industry-specific expertise.

• Activist Investors:

  • Shareholder activists have re-emerged in 2017, influencing major deals.
  • They have been active in pushing for portfolio optimization, including spin-offs and acquisitions.
  • Examples include Elliott Management's influence on AkzoNobel and White Tale Holdings' impact on the Clariant/Huntsman merger.
  • Activist pressure is expected to continue in 2018, as companies seek to enhance shareholder value.

• Sector-Specific Activity:

  • Commodity Chemicals:
    • Continued consolidation driven by SOEs and traditional oil and gas companies.
    • Examples: Nova Chemicals’ acquisition of a Louisiana olefins plant, ExxonMobil’s purchase of a Singapore aromatics plant, and SABIC’s acquisition of SADAF.
    • The sector is likely to see more synergy-driven deals and portfolio rebalancing.
  • Intermediates and Specialty Materials:
    • Consolidation in adhesives and coatings sub-sectors.
    • H.B. Fuller’s acquisition of Royal Adhesives & Sealants and Henkel’s purchase of Darex Packaging Technologies.
    • The coatings sector is expected to see further M&A activity, possibly involving private equity.
  • Fertilizers and Agricultural Chemicals:
    • Regulatory divestitures from previous mega-deals continue to drive M&A.
    • Examples: BASF’s acquisition of Bayer’s seed and herbicide businesses, FMC’s acquisition of DuPont’s crop protection business.
    • Further mega-deals are unlikely due to market saturation and regulatory hurdles.
  • Industrial Gases:
    • Consolidation continues, with the Praxair/Linde merger still in process.
    • Regulatory divestitures and regional consolidation are potential drivers for 2018.
  • Diversified Chemicals:
    • Fewer diversified chemical companies remain due to sector consolidation.
    • The Clariant/Huntsman merger failed due to activist opposition.
    • Future activity in this sub-sector is expected to be limited but not absent.

Key Information

• 2017 M&A Performance:

  • Total volume: 637 transactions.
  • Total value: US$46.4 billion.
  • Only one deal exceeded US$5 billion, compared to five in 2016.
  • Private equity accounted for 8.6% of 2017 transactions, down from 11.6% in 2015.
  • Activist investors had a significant impact on major deals.

• 2018 Outlook:

  • M&A activity is expected to remain strong, with a focus on optimizing existing assets and organic growth.
  • The chemical industry may see more deals driven by regulatory changes and market consolidation.
  • SOEs and strategic buyers are likely to continue shaping the M&A landscape.
  • Private equity may still play a role, especially in niche or complex deals.
  • The US tax reform is expected to have a major impact on M&A activity, potentially increasing domestic and international investment.

Conclusion

The 2018 outlook suggests that while the chemical industry may shift from high-growth mega-deals to value-creation and optimization strategies, M&A activity will remain active. Key drivers include regulatory changes, SOE investments, activist pressure, and the ongoing consolidation in various sub-sectors. The US tax reform is expected to influence capital deployment, potentially leading to more M&A activity in both domestic and international markets.